Last month the House of Commons gave the British prime minister the go-ahead to formally begin Brexit negotiations. The House of Lords is expected to approve this decision next week.

Let us assume for the sake of argument that Article 50 will be triggered on 1 March. Under the terms of the Treaty of Lisbon a new agreement must be reached within two years; the period may be extended, but only at the unanimous request of the other EU member states.

Let us further assume that no such extension is requested, in which case the UK will cease to be an EU member on 1 March 2019 at the very latest.

In the meantime negotiations will certainly begin on the subject of the agreements governing trade with the EU, but on which model: Norway, Switzerland, Canada …?

However, observers suspect that this will take at least another three years.

But quite apart from these trade agreements there is absolutely no doubt that the UK will cease to be an EU member as of 2019. Which means that all trade with the UK will require import and export documentation.

And in the case of Belgium the volume of trade is anything but small.

Trade with the UK

The UK is the fourth-largest customer for Belgian goods (to a value of 31.9 billion euros per year) and the fifth-largest supplier to Belgium (17.4 billion euros). In other words, Belgium’s exports will be hit harder than its imports.

The main categories of exports to the UK are transport equipment (namely cars from Zeebrugge, accounting for 26.1% of the volume) and chemicals (20.5%).

Although other sectors such as textiles and foodstuffs may not appear so important at first sight, Belgium is still the largest EU exporter of these products to the UK.

On the import side the main categories are mineral products such as oil and gas (21%) and transport equipment (21%).

Cheaper or dearer?

The fall in the value of sterling will lead to imports from the UK becoming cheaper, at least in terms of the “basic” purchase price, as the EU will certainly impose import tariffs. Also, drawing up import documents does not come free of charge.

The converse is also true: the UK will impose import tariffs, and the local declarant also has to earn his daily bread. In short, Belgian exporters will become less competitive than their British competitors.

A silver lining?

Whether the UK will remain Belgium’s fifth-largest supplier is difficult to predict. What is beyond doubt however is that new activities await our companies in the near future. After all, the British too will need to have a customs agent and/or tax representative here in order to handle their Customs formalities.

Or what about an overseas manufacturer with a European distribution centre in the UK? They will probably decide to re-route their goods flow. Via Flanders, for example.

And, since ships follow the cargo, it is highly likely that some shipping companies will change their rotations as a result.

In the wake of these changes it could well be that some companies will no longer be interested in having a London head office, once Britain is no longer in the EU.

In fact this is highly likely, given the drop in the number of EU headquarters when the UK decided not to participate in the European currency union.

This drop from 10% to 6% was all in favour of Brussels, which saw its share rise from 4% to 8.5%.